from the patents-costing-lives dept

Earlier this year, we wrote about the situation with a petition to the National Institute of Health (NIH) to let other companies produce Fabrazyme, a drug that treats Fabry disease. Fabry disease is an enzyme deficiency that can create very serious problems in those who have it -- including kidney failure and heart attacks. Genzyme holds the patent on Fabrazyme, but has a problem: it can't produce enough of the drug. That means people die. A group of Fabry patients petitioned the NIH to see if other companies could be allowed to produce just a little more Fabrazyme. They didn't ask to break the patent. All they wanted was to let others make the drug, and pay Genzyme a royalty. On top of this, it's worth noting that the key research for the development for Fabrazyme wasn't actually done by Genzyme, but was done by the Mount Sinai School of Medicine and was financed with taxpayer money from the NIH.

At the time, we doubted the petition would be approved -- and indeed, the NIH has rejected the petition. An opening was left for an appeal, if another petition is filed by a company that wants to make Fabrazyme, rather than the patients (you know, the folks actually suffering). As the statement of Robert Weissman from Public Citizen makes clear, this is a ridiculous situation:

Why is NIH resorting to legal gymnastics to avoid exercising its legal authority to ensure an adequate supply of an important medicine? NIH agrees Genzyme is failing to produce an adequate supply of the important medicine Fabrazyme. It is plain that removing the patent monopoly on the drug is a necessary condition to enabling other potential manufacturers to enter the market. Yet NIH chooses to deny a request to issue open licenses for the Fabrazyme patents -- a request for which it has undisputed legal authority -- on the Alice-in-Wonderland, self-justifying grounds that there are as yet no competing suppliers. Of course there are no competing suppliers -- why would any firm try to enter a market it believed closed by a patent monopoly?

Reader Comments

So...what the fuck?

We are literally willing to let people die in order to maintain the artificial scarcity that produces year after year of record profits for drug companies? What the fuck kind of monsters would do this?

Re: So...what the fuck?

Re: So...what the fuck?

Ugh, the NIH has a long and twisted history of syphoning off taxpayer money to do research, often at public universities, which then patent and license the shit out of their discoveries to private firms for profit.

Then they'll start whining about how they need to do all of this because of their "research" costs, despite the fact that their R&D costs are roughly 1/3 of their marketing costs.

In other words, evil isn't a new endeavor for these corporatist idiots....

Re: Re: So...what the fuck?

This statement is in error. I work for a university, and I can tell you for a fact that we spend no money on marketing (companies who want what we have to offer come to us, there's no need to market to them) and that 75% of any costs made on the license go directly back to the research - the other 25% goes to the patent costs, which are much higher than anyone would guess.

Re: So...what the fuck?

Welcome to the “land of the free”*.

*Certain limitations apply (life, liberty, and pursuit of happiness are not included). Void where prohibited. Limit of one per customer. Patent pending. Copyrighted Frances Scott Inc. all rights reserved. Any descriptions, images, or stick-figure drawings (analog or digital) without the express written consent of the FBI, CIA, and ICE (hereto referred to as “Disney”) is prohibited.

Re: Re: So...what the fuck?

At some point...

At some point, affected groups are going to take more proactive steps to get the medicine they need. I can understand why people would want to petition to get the drug approved - its a nice way of dealing with a bad situation. it didn't work and an appeal on the petition isn't likely to do much either.

But if I knew someone affected by Fabry disease, I'd sue the NIH for negligence. By passing on the petition, they acted negligently which contributed to the continued suffering and death for thousands.

I hate legal remedies like that - its not supposed to be this way - but since playing nice didn't work, its one time I hope they force others into action.

Re: At some point...

I'm not sure suing the NIH is the solution but Genzyme's monopoly of the market is a public health threat. People are dying from a disease for which Genzyme holds the only cure. This almost sounds like an abuse of market position that the Justice Department could address.
Maybe Fabry sufferers should petition the Justice Department next to encourage Genzyme to license its drug to other manufacturers in order to stave off an anti-trust investigation.
I don't know, I think the solution is earlier in the chain, like putting publicly funded research in the public domain.

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"Has that changed? Would taking away the patent have changed anything concerning the shortage? I am always wary of changes that don't actually address and solve the problem."

That may be true, but there are two inescapable conclusions:

1. Because of Bayh-Dole, this is an instance of publically funded discoveries being licensed as a commodity to private interests, with all the exclusions that such an arrangement implies, and

2. Because of that, no other company has invested in the capability to produce this medicine.

The key issue isn't that the NIH decided this because other companies wouldn't be able to ramp up production in time, it's that, because of NIH supported legislation, a beneficial public discovery that would have once been in the public domain is now locked up by a company, and THAT is the reason other companies aren't producing the medicine, and THAT is resulting in fucking DEATH....

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the article i read said even increasing production wouldn't be enough, they really need another company just to boost the work force up to an accepted level, even though that would take time. (trying to cite mt source, hopefully brb)

Re: Read the actual decision first...

Whether or not the stated reasons make sense is irrelevant.

The true reason is undoubtedly that Genzyme is paying the NIH some of their profits from being the only provider of the drug, and that would be in jeopardy one way or the other if the NIH allowed other producers. Either by asking for the same profit sharing setup in exchange for permission and getting called out, or by breaking the agreement and losing the $$ from Genzyme.... They do not want to lose one of their largest sources of dirty money...

Re: Re: Read the actual decision first...

No no no. Genzyme was right to patent Fabrazyme; that was a correct use of the patent system. The market interference occurred at a different point.
The publicly funded research should have been place in the public domain. Doing that with all public research is the first step to fixing situations like this.
Now with the publicly funded research in the public domain, another company can use that research to develop their own different cure for the same condition and can get their own patent on that different cure.
There. Two companies building mousetraps. If there's still a supply shortfall there's some other artificial restrictions in place mucking up natural market forces but this should take care of the big interference.

Re: Re: Read the actual decision first...

Based upon on the ambiguity and meaninglessness of your statement it appears that, as usual, anonymous cowards will proceed to make broad sweeping statements based on their misplaced bias and having no ecidence of anything at all ever versus actually considering the stated findings of fact.

Re: Read the actual decision first...

Re: Read the actual decision first...

Yes I read them - and they only make a really narrow kind of sense.

Two issues remain

1) Why did NIH allow a situation to arise where we are dependent on a single supplier. The semiconductor industry always used to operate on the basis of "second sources" - and big customers (the NIH is effectively a customer here) would always insist on the availability of a second source.

2) The argument presented is a kind of circular - chicken and egg argument. Clearly we cannot get out of the situation quickly - and maybe Genzyme will be back on stream before a second source was available - but equally clearly Genzyme cannot be relied on not to mess up again - so getting a second source in place BEFORE that happens would make good sense.

Re: Re: Read the actual decision first...

1. from the small bits able to gather its not that NIH allowed it, it appears more that no one else tried to get into the market previously. you cant force people to make the stuff if they dont want to.
There are alternative treatments that are being produced and apparently sini is suing these competing manufacturers for patent violations and trying to block production of those competing drugs in a couple countries (big surprise there huh?).

while neither NIH nor genzyme appear to be all that innocent in not doing much to prevent this situation from coming up, dont dismiss the FDA and sini for their roles in this.

and none of that really matters to the people who have this condition who are apparently asking for someone to come along and wave a magic wand which will allow some other company to get through a 2-5 year process and start shipping tomorrow (cant blame them for wanting that, but want does not have much effect on reality).

Re: Read the actual decision first...

No, their stated reasons are even more stupid than Mike made them out to be. Thanks for the link. Here are the relevant bits:

...NIH has determined that a march-in proceeding ... is not warranted at the present time because any licensing plan that might result from such a proceeding would not, in our judgment, address the problem identified by the Requestors.

The problem is that there is a shortage.

A march-in proceeding resulting in the grant of patent use rights to a third party will not increase the supply of Fabrazyme in the short term because years of clinical studies and regulatory approval would be required before another manufacturer's product could become available to meet patient's needs in the United States. NIH has no information that a company is expecting imminent FDA approval of a competing version...

You don't say?! No other company has gone through the trouble of making a competing version that they know would violate patents and thus open them up to patent lawsuits. Really? Amazing.

It's analogy time. Their house is on fire. Their cousin says he can put it out so they don't need to call the fire department. Someone comes along and says their house is going to burn down if they don't call the fire department now. And they respond with, "It's too late. More of the house will have already burned by the time they show up."

Finally, Genzyme has indicated that it expects the production of Fabrazyme to be back to full supply levels in the first half of 2011.

Oh, so the cousin also says there isn't a reason to call the Fire Department because he has everything under control. Even though he's the one that started the fire and let it get to this point, let's just trust him this time.

Secondarily, the '804 patent is not an obstacle for a company to conduct clinical trials in the United States in furtherance of regulator approval for a competing drug, because such clinical trials are exempt from infringement under the Hatch-Waxman statutory safe harbor provision.

This exemption is practically worthless. It gives companies an opportunity to spend millions of dollars on creating a competing product and putting it through years of trials, so that when the FDA finally approves it, they can then NOT sell it because the exemption isn't for actually selling it to the public. This is fantastic.

Notwithstanding the foregoing, NIH will continue to carefully monitor the shortage of Fabrazyme and will re-evaluate this determination immediately upon receiving any information that suggests progress toward restoring the supply of Fabrazyme to meet patient demand is no proceeding as represented.

In other words, they will continue to monitor the house to see if their cousin can actually stop the blaze, and if he can't then they will reconsider whether to call the Fire Department at that time. Of course, at that time, they will use the same logic, which is, by the time any one arrives, more of the house will have burnt down, so there isn't a reason to call.

In short, they've denied allowing any one to make a competing drug, simply because no one is currently making a competing drug, thus no one will be able to bring the supply up in the short term. So what about the long term? Oh it's OK, because Genzyme says they'll get supply issues under control this time. No really, they promise this time.

This should be an prime example

That the country is willing to fund medical research is great... until the fruits of that research get handed to entrepreneurs, which I don't understand. I paid for it. I came to know this pain first hand while trying to get some IT research I could have really used that I KNOW was publicly funded; after searching for some time I found it: locked behind a pay wall, two, actually. So the Gov. doesn't simply sell my data to the highest bidder, it sells it to anyone with a credit card. And I? Got the shaft. Re-invented the wheel, essentially.

The best there is

There was only one catch and that was Catch-22, which specified that a concern for one's own safety in the face of dangers that were real and immediate was the process of a rational mind. NIH was crazy and could forced to allow other companies to manufacture Fabrazyme. All it had to do was ask; and as soon as it did, it would no longer be crazy and would have to stop those companies from manufacturing Fabrazyme. NIH would be crazy to ask other companies to manufacture more Fabrazyme and sane if it didn't, but if it was sane, it had to ask. If it asked, it was crazy and didn't have to; but if it didn't want to, it was sane and had to. Genzyme moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.

First off, you have to understand the context of the story. Genzyme doesn't have a patent on the drug, neither does the NIH. Mt. Sinai is the university that licensed the drug to Genzyme and Mt. Sinai is the patent holder. The NIH can do something about the patent, but it doesn't own the patent.

Second, this is an orphan drug, which means it serves very small numbers of people. Getting companies to invest in anything with such a small market is difficult, which is why the drug costs $36,000 a month. Better have a good insurance package for that one.

Third, the order requires Mt. Sinai is required to notify the NIH if Genzymes progress change or if they are asked by anyone else to allow manufacturing of the drug. This gets back to the point of Genzyme being the quickest one to manufacture the drug again.

The report even states that getting rid of the patent wouldn't fix this problem, since it is an orphan drug, without a patent in the first place, would anyone be producing this drug. There is a reason for the benefits received for manufacturing orphan drugs.

A few salient points:
1) You do not have the right to life saving drugs. If you can afford them, you can have them. The .gov has no responsibility to step in and save your life.
2) A company has a responsibility to make money. That's what they do. It's not fair to a company that spends millions on research to have their cash cow sold at auction because someone else wants the milk.
3) This is a capitalist society. If I have something you want, you will pay me for it. It could be my time, my house or my knowledge, but nothing is free, unless I choose to give it away. The company is making as much of the drug as they can, so they are selling as much as they can. Supply and demand. If they were artificially depressing production output for profit, they should be hammered.

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If they were artificially depressing production output for profit, they should be hammered.

I thought you said they were supposed to be making money. If depressing output would increase profit, you wouldn't support that? If not, why do you support letting people die to keep competition away from this company, but you don't support it in other profit-seeking scenarios?

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"1) You do not have the right to life saving drugs. If you can afford them, you can have them. The .gov has no responsibility to step in and save your life."

They do when they're using our tax money to fund the research....

"2) A company has a responsibility to make money. That's what they do. It's not fair to a company that spends millions on research to have their cash cow sold at auction because someone else wants the milk."

Try to read. The company didn't do the research. NONE of it. Sinai did....and with taxpayer money. Besides, R&D costs for pharma companies are largely bullshit. They spend vastly more on marketing and lobbying....

Re: A few salient points

1) You do not have the right to life saving drugs. If you can afford them, you can have them. The .gov has no responsibility to step in and save your life.

When Taxpayers fund it, there is no way in hell a private corporation should be able to lock it up.

2) A company has a responsibility to make money. That's what they do. It's not fair to a company that spends millions on research to have their cash cow sold at auction because someone else wants the milk.

Dont you mean millions of taxpayer dollars? The responsibility to make money at the expense of human life?

3) This is a capitalist society.
Exactly! and since the taxpayers funded it, where is our return? Oh thats right we dont get any. All we get is a sharp pain in the a** while being fu*ked.

"if they were artificially depressing production output for profit, they should be hammered."
They are doing exactly that.

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You do not have the right to life saving drugs. If you can afford them, you can have them. The .gov has no responsibility to step in and save your life.

I would hold that is exactly one of the roles of government - the protection of its citizens.

I have a genetic medical condition that I can do nothing about. The flare-ups (when uncontrolled) are frequent and debilitating and include intense pain, hospitalizations, loss of work time and a whole host of other effects I wouldn't wish on my enemies.

It is very treatable with a medication on the orphan drug list. The cost of this drug and its administration (annualized) is approximately US$40,000.

What, exactly, do you expect people like me to do if this drug became unavailable from problems in manufacture, under-estimation of usage patterns, or the patent-holder deciding to stop production?

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In the general case, I agree with you. Unfortunately, none of what you wrote applies to the case in hand.

If there were no patents involved, then we can let the government off the hook. No one, however, is asking the government to force others to make the drug. They are not even asking the government to stop limiting who can make the drug. They are asking the government to give other companies the opportunity to license the drug. This company's cash cow was created by tax payers and locked up by the government. It's not a matter of taking away the company's cash cow, it's a matter of taking back the cow we lent them.

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2) A person has a responsibility to make money. It's not fair to a person that pays thousands in tax on their hard-earned money to then have their cash used to supply a product for a private enterprise that then attempts to sell the person their own product back at a higher cost.

3) This is a capitalist society. If an enterprise cannot produce enough money to market a drug then tough shit - oops the tax-payers are capitalists too!

How much a company spends on marketing isn't part of the equation. Marketing increases sales, increases profit, so its not a negative thing (unless of course, your marketing sucks.)

Coke and Pepsi spend more on marketing than a drug company, but you don't see them getting $36K a month out of their customers. For some drugs, their cost of production is probably about the same.

Genzyme didn't do the research (maybe not all) but bringing a drug to market is still very expensive. The D costs more than the R. Getting things through the FDA is tough, we could address those issues to lower costs but would that change the somewhat safety levels we currently have?

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R of course is cheaper than the D. R involves a bunch of scientists working in a lab doing research. D involves clinical trials with a much bigger bunch of actual humans. The R could involve one guy toiling in the lab, but since pharma sucks so bad at research, it actually involves whole teams of researchers that won't actually discover anything. Still, the clinical trials are the costly part, which is why one strategy for all drug companies is to kill off prospects as quickly as possible, a fate that Viagria was bound for until someone figured out that giving a guy a woody could be profitable.

SG&A costs for Pepsi YE 09 were $15 billion. Pfizers same year end number was $14 billiion.

Mt. Sinai, which owns the patent, licensed it to Genzyme, they didn't sell it.

The order actually kind of made sense because if the NIH ordered the patent invalidated, Genzyme would still be the first to get the drug back on the market. You can argue that if there was no patent in the first place, other companies would be manufacturing it already so the Genzyme issue wouldn't be an issue, but that is a different argument.

If that were the argument, I would say that without orphan status, the drug wouldn't be on the market by anyone as the people who need the drug are too small a market to be concerned with.

I know, it sucks that life saving drugs are not available while companies invest in giving guys woodies because that is profitable.

Drug companies suck. They really do. They can't discover anything. Their whole business model has been to say they have to charge high prices and receive patents because they spend so much money on research. Of course, now they can't bring any drugs to market and they have to buy other, small companies to have drugs in the market.

In the near future, big pharma will be nothing more than venture capitalists. Their excuses will go away but I don't see things getting any better, at least for consumers.

They didn't sell the patent, they licensed it. And yes, you can get a drug patent without FDA approval. Usually the patent is filed 8-10 years before the drug gains approval, giving a company 10-12 years of exclusivity barring any extensions.

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If an enterprise cannot produce enough money to market a drug then tough shit

Exactly why the Orphan Drug law exists. The drug in this article only treats about 1K people, it is sold for $36K a month. If there were no orphan drug law, no one would be making this drug (well, trying to make it, as Genzyme seems to have screwed up their process.)

The NIH decision

The NIH has denied the petitioners the right to hearing. The patent holders obviously made a private case against the initial petition to the NIH, and the NIH has taken their side against the petitioners, but without the benefit of a hearing, or further opportunities for the petitioners to respond to the patent holder's objections to the march-in request. I previously was involved in the only NIH march-in case involving a drug to go to a hearing. It was the 2004 ritonavir case. In that case, Abbott made several concessions on the pricing of ritonavir, for about 75 percent of AIDS patients, in order to avoid the march-in. The Faby's patents have serious concerns, and they are well represented by Allen Black. They think they are better off if the NIH will act on the patent. I don't see how the NIH can justify not giving them an opportunity to make their case in a public hearing, and to present evidence as to how the remedy they seek will address the concerns they have about current and future shortages of Fabrazyme. There is more context on this case here: http://www.keionline.org/fabrazyme

James, your case with ritoavir is quite different than this case, your case was about price, correct? This case is about supply (or lack of) and wouldn't be solved by a march in in the short term.

If you think there should be more than one company to manufacture an important drug, you could logically claim that the govt. shouldn't allow any single company to be the only manufacturer of any drug.